Perfection and speed

“Culture eats strategy for breakfast” is a famous quote attributed to the late management thinker Peter Drucker. Like most quotes from famous people, this one also needs to be treated with caution.

A quick Google search offers about 177,000 entries related to this quote, which has been adapted more than a hundred times. The one I like the most is “Culture eats strategy for breakfast and technology for lunch”. I think the quote can be boiled down to the claim that an organisation’s culture plays a more important role in its performance than its strategy, or technology for that matter.

A closer look reveals that there is no evidence that Peter Drucker actually said or wrote it. Since the great management thinker died in 2005, we cannot ask him anymore. The quote might therefore be one of the many management myths that get repeated over and over again in popular management magazines and in corporate boardrooms.

But does it hold up to a rigorous scientific examination? Professor Michael Wade of IMD, a worldwide top 3 tier school in executive education, thinks that it is a gross oversimplification. The relative importance of culture versus strategy depends on at least four factors: industry, objectives, context and history, external environment.

If you are in an asset-heavy industry that depends on long-term investment plans, for example automotive, shipbuilding or steel manufacturing, then strategy is arguably more important than culture. The contrary might be true for asset-light industries such as consulting, education, services in general, that all mainly depend on the quality and the commitment of the workforce.

Precedence of either strategy or culture also depends on the current challenge you are facing. If, for whatever reason, you need to concentrate on short-term financial targets, strategy is in the lead and culture may follow. The organisational context, the history and tradition of a firm also play a role. If a company built a business around capabilities such as precision and is suddenly facing an environment where speed is more important, no strategic change will bring you there; this is a matter of culture.

Finally, Wade says, the prevailing environment plays a decisive role. Under unstable and unpredictable conditions, a robust strategy is key. This all sounds sensible, and I wonder how the balance between culture and strategy can be struck in an intercultural environment. Country managers and local CEOs have many stories to tell regarding what kind of local brick walls they are hitting whilst executing a strategy devised by their headquarters.

My country Switzerland is known for its precision industry, be it in machine tools, watchmaking, medical technology, or biotechnology and pharmaceuticals. Precision and love for detail is a cultural trait my fellow Swiss are proud of and good at. However, clients here in Korea and elsewhere might not need such precision but rather a lower price, pragmatic execution and fast after-sales services.

Local CEOs often have a hard time explaining the specifics of Korea to their head office people. The antagonism between precision and speed can be observed in many industries. Fast product development with agile methods will not generate the best product but rather a “minimum viable product” or MVP for early adopters, who then will give valuable feedback for product improvements. A culture of precision and perfection is clearly an impediment to fast-paced MVP development. I experienced this within my own organisation.

The Marketing and Product Development team launched an MVP of a trade information platform last year. My colleagues in consulting and in the markets, including myself, were not so amused. I felt that I couldn’t release this to our clients here in Korea for fear that an MVP is not what they would expect from the Swiss Business Hub. I knew that Koreans generally prefer speed over precision, but our local corporate culture was not yet ready to sacrifice initial perfection for speed.

We all know and often mention the Pareto Principle or the 80/20 rule. Especially we Swiss love the concept as it was invented by economist Vilfredo Pareto at the University of Lausanne in 1896. MVP is the applied Pareto principle in product development. I realised that something was blocking me from launching a product that is not perfect.

While writing this article and reflecting on the above example, I, again, have to acknowledge how sticky corporate culture and individual behaviour are, both in small organisations and large corporates. So, to come back to our initial quote, culture might not necessarily eat strategy but would rather glue strategy’s feet to the ground and slow down its stride.

Roger Zbinden is head of Swiss Business Hub South Korea. The Swiss Business Hub South Korea is the Seoul-based representative of the official international trade and investment promotion agency Switzerland Global Enterprise (S-GE).